Trump’s Covfefe Moment? How the COVID-19 disease could be a blight or a boon for his transformational presidency of the United States.

Trumps Covfefe Moment How the COVID-19 disease could be a blight or a boon for his transformational presidency of the United States.
Coronavirus Disease 2019 (COVID-19), a disease belonging to the SARS (Severe Acute Respiratory Syndrome) family of viruses has been spreading around the world.
This coronavirus (scientifically termed the SARS Cov-2 virus) has been particularly dangerous for elderly populations- especially in care homes- and forced unprecedented mass quarantine shutdowns stretching from major Chinese cities to Latin America’s metropolises. The impact on the economy of this shutting down of public and social life has been variously described as a supply and demand shock, an unprecedented recession, and has even been termed the “Greater Depression”. Although its economic, and subsequent political, effects are yet to be fully experienced around the world, there are evidently some troubling signs on the road ahead.

With respect to the political impacts, the various positions that different rulers and leaders around the world are taking have already emerged. Some (very few) leaders are still outright ignoring this disease. Some nations took a very sensible approach to this crisis; responding quickly and reducing their political divisions in favour of a collaborative approach. Most leaders sought to ignore the issue until it became politically impossible owing to growing casualties and media attention. In the aftermath, key players in world politics have already positioned themselves for a blame game. China has sought to downplay any role it may have had in the spread of the pandemic while the United States’ current administration has switched from trying to downplay the virus (up to around mid-March) to blaming China and seeking a range of punitive and retributive measures. Some local political figures in the United States have even sought to take China’s government to court in order to get retribution.

Map of United States States by Per Capita Covid-19 Infections
Figure 1: Map of United States States by Per Capita Covid-19 Infections

The federal government’s sluggish response to the virus was evidenced in the nonchalant tone of the early White House press briefings. It is true the government implemented flight bans from China and other countries early on (in late February) which were heavily criticised as being somehow racist in the news media. It was also in this period that Trump’s political opponents, Democratic leaders at the federal and state level such as Nancy Pelosi and New York City Mayor Bill De Blasio, criticised these measures and encouraged citizens to keep going out to restaurants and shopping. Needless to say, an important aspect motivating these political fights is the upcoming presidential elections in November 2020.

Ironically, perhaps in order to blunt these early political skirmishes, the initial Trump White House press briefings led by Vice-President Mike Pence were muted. Trump generally stayed away from the limelight. At this same time, as the numbers of infections began to emerge in Washington State (on the West Coast of the United States, to the north of California) and in New York State, it is their respective Republican and Democratic governors that became the most prominent political figures reacting to the virus. In particular, New York State Governor Andrew Cuomo began to give daily information updates which included recommendations for public protections that gained national attention. With an eye to the falling public opinion numbers in the polls and doubtless stirred by the increasing attention given to Cuomo, President Trump decided to directly take over the White House briefings and improved the presentations of information by taking a more sober tone. He also invited members of the Coronavirus Task Force committee, including experts such as Dr. Anthony Fauci, to participate. Unfortunately for President Trump, the limelight and press narrative again shifted away from him toward Dr. Fauci, leading to increasingly erratic and public tensions between the more hopeful tone struck by Trump and more sober Fauci.

This tension occurred in the background of the worst stock market crash since 1987 and an unprecedented economic depression that would begin to be felt right at the moment when Trump would be seeking re-election this autumn. In order to avoid President Herbert Hoover’s fate following the 1929 Stock Market Crash (after which he lost an election to democratic rival Franklin Delano Roosevelt), Trump and the Republicans in the Senate managed to convince a range of democrats, including the left-wing Democratic Socialists gathering under Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez, to back an emergency fiscal stimulus bill. The bill passed congress with unprecedented speed and was signed into law as the CARES Act. The Act provided an unprecedented $2 trillion dollars of fiscal stimulus as a kind of electro-shock money therapy to revive a collapsing consumer, investor and foreign markets sentiment. This came alongside a gigantic and eclectic range of U.S. Federal Reserve monetary stimulus measures targeting financial institutions, small and major businesses, stock and bond investors and foreign currency exchange rates to the dollar.

The White House, Treasury Department, Congress and the Federal Reserve all found a rare moment of agreement due to the economic abyss that they were staring into in mid-March 2020. As Emperor Caesar was warned: “Beware the Ides of March!”. A range of long-running underlying economic issues in the U.S. and world economy had been pushed to the fore by the Coronavirus lockdowns. Small and large business operations that were operating on minute margins (such as car rental companies, airlines, restaurants) and already highlight leveraged (using low-interest bank loans to survive quarter-to-quarter), were suddenly threatened with a wipeout. Firing workers would be an immediate response, but the rot would spread through the (especially commercial) real estate markets, financial institutions and insurance companies, and, in the longer term, a deflationary depression cycle would take over, due to people losing their work and thus reducing spending, consumption and thereby (credit and material) production. As though this credit and consumption demand shock was not enough bad news, in April the impact of the supply shock (due to a partial shutdown of Chinese and East/South-East Asian manufacturing in the preceding months) meant that the price of oil (needed for manufacturing and transport) collapsed. Although this would technically be good news for manufacturers and commuters, it is actually terrible news for economies around the world and in the U.S. specifically.

This is due to the fact that various investing economies (Saudi Arabia, Qatar, United Arab Emirates) are losing a lot of their capital and thus will reduce their sovereign wealth fund investments. This impacts several of the entrepreneurial start-up companies (for example the Japanese Soft Bank’s investments in conjunction with Saudi wealth fund has taken large losses this year). Furthermore, manufacturing countries such as China are having reduced demand meaning they will pursue cheaper oil prices and reduce their oil demand, thus further reducing oil prices. In the U.S. this particular issue is a major problem for Trump and the Republicans because the (shale) oil (Republican-dominated) states of Texas, Oregon, Alabama and Alaska are seeing major oil majors (companies) shutting down wells and laying off workers. The shale oil revolution brought major economic booms to these Republican-leaning voting communities.

USA ElectionsMeanwhile, Trump has decided to pivot the briefings away from a more sober tone of March toward a more aggressive and “campaigning” style- given the fast approaching date of the November elections. Trump thus played a typically smart social media game by flirting with the anti-shutdown voices, tweeting in favour of voices calling for states and shops to reopen and advocating the use of alternative drugs as a type of preventative means to avoid infection (a “prophylaxis”), as well as pumping up the news of potential vaccines.

Another campaigning angle has been to drive up the anti-immigration rhetoric by attaching his early decision to shutdown international flights, and more recent executive orders enacting stricter immigration controls on the Mexican border, to his campaign image as a president struggling to “Keep America Safe” while being undermined by political and press opposition.

Trump has also touted his efforts at promoting a plan to reopen states and the country, as well as promoting a strongman image and patriotic culture by refusing to wear masks in public, promoting a carefree lifestyle, and promising a tough stance against China. What all this means is that Trump may just manage to, once again, defy all the rules and odds of presidential image and elections. In 2015/16 Trump’s outspoken and eccentric style found many detractors but an almost equal number of near-fanatical followers thanks to his promise of fighting a defined and almost cartoonish set of enemies within and outside the United States. The current circumstances would, on paper, suggest that any leader presiding a country that experiences tens of thousands of deaths and the worst economic depression on record would never be able to be re-elected. Yet the sabre-rattling with China, and various democratic and news media missteps in reaction to Coronavirus and responding to Trump actually give him a fighting chance to pull off re-election. The coronavirus would normally be a disastrous development for any president. Yet the “covfefe” element that Trump sparkles onto the spectacle that is modern U.S. politics may change all of that.

By Idir Ouahes

Trump’s Covfefe Moment? How the COVID-19 disease could be a blight or a boon for his transformational presidency of the United States. was last modified: June 12th, 2020 by MIUC

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